Union Finance Minister and Deputy Chief of Staff Olaf Schultz speaks to the media on May 21, 2021, at an informal meeting of the Eurogroup.
Carlos Costa | Agencies France-Press | Getty Images
LONDON – Germany on Friday welcomed the US proposal that companies around the world pay at least 15% tax on their profits.
U.S. The Treasury Department released its plans on Thursday, saying international negotiations should be ambitious – that is, more than 15%. The corporate tax rate in the United States is currently 21%, but President Joe Biden plans to raise it to 28% and wants higher tax rates in other parts of the world.
“This is a really big step,” Union Finance Minister Olaf Schultz said Friday morning about the US financial announcement. “I’m so happy this morning.”
“We seem to have a solution this summer. The new administration in the United States is making a difference because it said it was possible,” Schultz told reporters in Lisbon, Portugal.
“This is the best opportunity for global tax reform (which will fight the race to the bottom),” he added.
This issue may be controversial within the EU, where different member states impose different corporate tax rates, thus attracting well-known companies. For example, the tax rate in Ireland may be 12.5% and in France it may be up to 31%.
In April, the Guardian reported that Irish Treasury Secretary Pashall Donohue had allowed small countries to introduce lower tax rates, making them less efficient than large economies.